Select Committee on Public Accounts Minutes of Evidence

Memorandum submitted by Simon Bowers, The Guardian

  I thought it might be of assistance to the committee to note some research The Guardian carried out on the value for money being delivered by the National Programme for IT (NPfIT) between November 2006 and January this year.

  I canvassed a small number of significant NHS suppliers and long-standing industry experts on how much it would cost, outside the NPfIT, to supply patient administration systems (PASs) to the standard specified by the NPfIT (a) for an acute hospital trust, and (b) for a community or mental health trust. Most gave their opinion on condition of anonymity. One exception was Stephen Critchlow, executive chairman of software group Ascribe plc.

  All agreed that the a conservative estimate for an acute hospital trust system was £2 million, while a conservative estimate for a mental health/community system was less that £250,000.

  I put these figures to NHS Connecting for Health. In reply, a statement was sent to me saying: "The figures you quote for costs of systems are not comparable with what Local Service Providers deliver."

  All of the above information went into an article published on 22 January 2007.

22 Jan 2007: The Guardian—Page 21—(637 words)

  Financial: NHS pounds 6bn IT system poor value, say experts: Schemes "costing four times going rate": Health officials reject claims of overpayments

  By: Simon Bowers

  Leading healthcare IT experts have warned that the NHS's troubled pounds 6.2 billion system upgrade is costing taxpayers substantially more than it should. They claim the same functions could be delivered for considerably less outside of the national programme for IT, dogged by delays and software setbacks.

  Stephen Critchlow, executive chairman of software group Ascribe, said he "could not see where value for money is coming from". There was evidence, he added, to suggest the NPfIT was installing and running systems for several times the going rate.

  Phil Sissons, a former executive at the software group Torex—now part of iSoft—and an ex-consultant to the NPfIT, said: "Publicity from the national programme was that they got some good deals because of the buying power of the NHS.

  "But I don't believe they reduced the cost at all. There are multiple margins being added to the process each time there is an extra layer of management or another company involved."

  Doug Pollock, managing director of software supplier Cambio, who has also worked within the national programme, said these multiple margins were sometimes "scandalous".

  From the outset, NHS bosses promised the centrally organised 10-year IT upgrade programme—covering hospital trusts and GP practices across England—would be pounds 3.6 billion cheaper than the cost of upgrading systems on a piecemeal basis.

  However, the first three years have proved troublesome, with deliveries of patient administration systems (PASs) to acute, primary care, community and mental health trusts falling far short of targets—and, most importantly, without delivering the promised clinical functionality. Cost savings, NHS bosses still insist, remain on track.

  Meanwhile, the NHS's head of IT, Richard Granger, has been busy compiling a catalogue of alternative suppliers. Industry insiders believe they could help the troubled project—the largest civil IT project in the world—evolve from a national into a local programme. At the same time, the Department of Health continues to make multimillion pound payments to its five lead regional contractors, known as local service providers (LSPs).

  At the end of March last year, NHS fig ures showed US consultancy firm CSC—LSP for the north-west region—had only installed PASs at 58 community or mental health trusts and at eight acute trusts.

  Independent suppliers canvassed by the Guardian—including Ascribe and others who asked not to be named—said the going rate, outside NPfIT, for providing a comparable acute trust PAS was about pounds 2m, while community or mental health systems could be delivered for less than pounds 250,000. By the end of March, however, the DoH had paid CSC pounds 119 million—almost four times what it would have cost to have similar systems delivered outside the NPfIT.

  An NHS spokesman told the Guardian: "We are not overpaying CSC. The NHS pays LSP suppliers in accordance with contracted schedules. The figures you quote for costs of systems are not comparable with what LSPs deliver."

  The spokesman pointed out that "significant infrastructure", which is yet to be fully utilised, had also been delivered. This is believed to be a reference to computer servers housed remotely at central data centres. Last year, the NHS's largest-ever computer blackout was traced back to the Maidstone data centre. It was blamed for bringing down PAS systems at about 80 trusts for up to four days. A back-up system failed to function.

  NHS bosses have repeatedly insisted tough NPfIT contracts mean taxpayers will never be left paying the cost for work that had not been delivered to standard.

  No detailed figures for DoH spending on NPfIT are available since last March, but a number of sources within LSPs have privately confirmed multimillion-pound payments have continued to flow.

  A number of rogue acute trusts have become so frustrated with the NPfIT that they have opted out, forgoing central government funding in favour of selecting their own IT suppliers.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2007
Prepared 17 April 2007